Court of Justice considers interpretation of Open Internet Regulation for first time

The CJEU upheld the principle of net neutrality when considering packages offered by a service provider in Hungary.

The Court of Justice of the European Union has ruled on the interpretation of the Open Internet Regulation for the first time in Joined Cases C-807/18 and C-39/19 Telenor Magyarország Zrt. v Nemzeti Média- és Hírközlési Hatóság Elnöke.

It ruled that the requirements to protect internet users’ rights and to treat traffic in a non-discriminatory manner prevent an internet access provider from favouring certain applications and services by means of packages enabling those applications and services to benefit from a ‘zero tariff’ and making the use of the other applications and services subject to measures blocking or slowing down traffic.

Background

Telenor provides internet access services to its customers in Hungary. It supplied two packages called My Chat and MyMusic. They offered preferential access (known as ‘zero tariff’) meaning that the data traffic generated by certain specific applications and services did not count towards customers’ data consumption. In addition, once they had used up their data, they could continue to use those specific applications and services without restriction, while measures blocking or slowing down data traffic were applied to the other available applications and services.  The Hungarian authorities said that these packages did not comply with Open Internet Regulation 2015/2120. The case reached the courts and the case was referred to the CJEU.

The Hungarian referring court asked about how it should interpret and apply:

  • Articles 3(1) and (2) of the Regulation, which safeguard a number of rights for end users of internet access services and prohibits providers of such services from putting in place agreements or commercial practices limiting the exercise of those rights; and 
  • Article 3(3), which sets out a general obligation of equal and non-discriminatory treatment of traffic.

The Court’s decision

The Court observed that Article 3(1) provides that the rights which it safeguards for end users of internet access services are intended to be exercised ‘via their internet access service’, and that Article 3(2) requires that such a service does not in any way limit the exercise of those rights. In addition, it followed from Article 3(2) that the services of a service provider must be assessed in the light of that requirement by the national regulatory authorities, subject to review by the courts, and taking into consideration both the agreements concluded by that provider with end users and the commercial practices in which it engages.

The Court found that agreements, by which customers subscribe to a package combining a ‘zero tariff’ and measures blocking or slowing down the traffic linked to the use of ‘non-zero tariff’ services and applications, may limit end users exercising their rights, under Article 3(2) of Regulation 2015/2120, and have an impact on a significant part of the market. Such packages are likely to increase the use of the favoured applications and services. As a result, they may reduce the use of the other applications and services available, depending on the measures by which the service provider makes that use technically more difficult, if not impossible. Furthermore, the greater the number of customers concluding such agreements, the more likely it is that, given the scale, the cumulative effect of those agreements will result in a significant limitation of the exercise of end users’ rights, or even undermine the very essence of those rights.

When considering Article 3(3) of Regulation 2015/2120, the Court found that no assessment of the effect of measures blocking or slowing down traffic on the exercise of end users’ rights is required when making a finding of incompatibility with that provision. Article 3(3) does not set out a requirement to assess if the general obligation of equal and non-discriminatory treatment of traffic has been complied with. In addition, the Court held that, where measures blocking or slowing down traffic are based on commercial considerations (rather than objectively different technical quality of service requirements for specific categories of traffic), those measures must in themselves be regarded as incompatible with Article 3(3).

Consequently, generally speaking, packages like those offered by Telenor are liable to infringe both paragraphs 2 and 3 of Article 3 of Regulation 2015/2120.  National regulators and courts may examine those packages at the outset under Article 3(3).

Published: 2020-09-17T16:00:00

    Please wait...